Money in American Politics

Many if not all Americans are aware that money plays a large role in American elections, but fewer people know exactly how. Check out these five facts on election campaign finance to check your knowledge, or learn more.

Thanks to Learning Life intern Samantha MacFarlane for helping to research and write these facts.

Federal Election Spending More than Triples in 14 Years

Spending on election campaigns has increased substantially nationwide. In federal elections (i.e., elections for Congress and the President), total spending by candidates, parties and interest groups increased from $1.6 billion to $6.3 billion from 1998 to 2012. The split between Democrats’ and Republicans’ spending fluctuates between 40% and 60%, often leaving 1% just to third party spending.

Below are the spending totals during the last four presidential elections. Click here for the spending totals during mid-term Congressional elections in 1998, 2002, 2006, and 2010.

There are spending limits for individuals but not for all organizations. For 2015-16 federal elections, individuals can give up to $2,700 to a candidate per election, and PACs (political action committees) and parties can give up to $2,700 or $5000 depending on the type of organization.

However, due to the U.S. Supreme Court’s controversial Citizens United v. FEC decision in 2010, political organizations can, separately, collect and spend an unlimited amount to attack or support any federal candidate, so long as these organizations do not formally coordinate with any particular candidate (see below for more on Citizens United v. FEC).

Federal elections are largely financed by special interest groups trying to promote their own goals and ideologies. Among the many special interests putting money in politics, finance (banks, investment firms, insurance companies, real estate investors) give the most.

The financial sector often splits contributions between the two major parties, leaning slightly towards the party in power. Most business groups give more to Republicans, but unions, lawyers, lobbyists, and communications & electronics industries tend to give more to Democrats.

In this landmark decision, the U.S. Supreme Court opened the way for even more money in politics. The Court’s majority ruled that the First Amendment, which asserts the freedoms of religion, speech, press, assembly, and petition, protects, as a form of speech, independent organizations’ (e.g., businesses, labor unions, political action committees) right to produce media supporting or opposing particular candidates. These groups can now spend unlimited amounts to broadcast political messages supporting or opposing candidates as long as they are not collaborating with a candidate or party and no financial transactions between the two are involved. Following this case, some groups became “Super PACs” — political action committees that can engage in political advertising without limits on their income and spending.